Egypts President Hosni Mubarak and President George Bush in Sharm al-Sheikh. Photograph: Shawn Thew/EPA

President George Bush may have been feeling upbeat as he wrapped up his Middle East tour in Egypt today and headed back to Washington laden with gifts from kings and emirs.

But otherwise he has little to show for his eight days in the region and - with the glaring exception of Israel - he can have little doubt that US policies are both unpopular and unsuccessful.

Less than a week after he announced - to widespread disbelief - that an Israeli-Palestinian peace treaty could be signed within a year, the Gaza Strip saw its worst fighting in months, when Israel killed 19 members of Hamas it said were involved in firing rockets across the border.

Talks between Mahmoud Abbas and Ehud Olmert seemed to be going nowhere slowly, with cynics talking of a "virtual", not a real, peace process.

And now the resignation of Olmert's far-right coalition partner, Avigdor Lieberman, has underlined the fragility of the Kadima-led coalition in the face of even minor concessions to the Palestinians.

Middle Easterners may be less surprised than the Americans by how rapidly things have deteriorated since November, when Bush hosted the Annapolis summit - belated recognition of the urgent need to do something after seven years of letting the conflict fester.

But hardliners are quick to blame Washington: "This crime is the ugly fruit of Bush's visit to the region," Khaled Mashal, the Hamas leader in Damascus, said of the latest Gaza killings. Mahmoud Ahmadinejad, the Iranian president, followed suit.

Lack of progress on the ground made it hard for Bush to press his Arab allies to do much more to help after the Saudis went to Annapolis and the smaller Gulf states made generous donations for Palestinian economic development.

Condi Rice talked to them of the need for "outreach". But none is prepared to go any further towards "normalisation" with Israel without evidence of a deal with the Palestinians.

"I don't know what kind of outreach we can have for the Israelis but to offer a peace that is built on equity and justice for all," retorted Saudi al-Faisal, the kingdom's veteran foreign minister.

The president was encouraged by signs of progress in Iraq, despatching Rice from Riyadh to Baghdad to congratulate the Nuri al-Maliki government on its repeal of the law banning former Ba'athists from government jobs - a small but necessary step towards national reconciliation.

Yet Iraq still casts a giant shadow over the region, a magnet for jihadis and a constant reminder that Iran remains the greatest beneficiary of the overthrow of Saddam Hussein and the chaos that has followed.

Bush found his Arab interlocutors less concerned about Iran than he is. Recent months have seen something of a rapprochement with Tehran, with Ahmadinejad taking part in the hajj pilgrimage to Mecca and some cautious fence-mending across the Gulf.

Last November's US intelligence report stating that Iran had halted its nuclear weapons programme undermined the hawks in the US and Israel. Only the US has warned Tehran of "serious consequences" if there is a repeat of the recent incident involving American warships and Iranian Revolutionary Guard speedboats in the Straits of Hormuz.

Even if the rulers of Kuwait, Bahrain and the United Arab Emirates do genuinely fear the Iranians (the Bahrainis hint darkly at Hizbullah-trained "sleeper cells" waiting to strike and the Saudis worry about their restive, Shia eastern provinces, home to their vast oil reserves) their peoples remain deeply suspicious of American power.

Arab commentators warned all week against Bush dragging the region recklessly into a new confrontation. Iran's nuclear ambitions were invariably coupled with furious denunciations of Israel's all too real WMD arsenal and western "double standards" in tolerating it.

Bush's "freedom agenda" was distinctly muted. Promoting democracy and universal values seemed like a good idea after the Iraq war but looked less attractive when loyal allies fretted about the strength of domestic Islamist opposition - the impressive performance of the Egypt's Muslim Brotherhood in the 2005 elections was the most glaring example of this. When Hamas swept into power in the Palestinian territories a few months later, the new watchword was "stability".

US officials insisted in media briefings that in private the president had raised concerns about these issues. "Heads nod," said Stephen Hadley, the national security adviser.

But in his only formal speech of the trip Bush spoke in generalisations that will be easy to ignore. Imprisoned Saudi and Egyptian bloggers and journalists, beleaguered NGOs and human rights activists are likely to see little change.

Air Force One's brief stopover in Egypt seemed to symbolise the limits of the influence Bush can wield in his final year in office. Hosni Mubarak, in his fifth consecutive term as president, chose to receive his guest without fanfare in Sharm al-Sheikh on the Red Sea, where there is no risk of the sort of demonstrations routinely seen in the teeming streets of Cairo.

Mubarak came to power when Anwar Sadat was assassinated by Egypt's homegrown jihadis back in 1981, and has been the recipient of the largest amount of US aid to any country except Israel ever since - one reason why Islamists at home and abroad routinely lambast him as a "Pharoah" in the pocket of "Crusaders and Jews" who has resisted attempts to get him to open up his country's sclerotic political system.

Now, to his fury, he is being accused by the US of failing to secure Egypt's border with the Gaza Strip and thus facilitating Hamas attacks on Israel.

Bush, many Arabs argue, has been the architect of his own undoing since 9/11 and the invasions of Afghanistan and Iraq. Most would probably have preferred it if he had stayed at home.

As Mubarak put it slyly, in an unmistakable reference to Iraq: "We have in our region and elsewhere examples of societies that faced instability and chaos as a result of uncalculated and sudden transformation." The US president probably got the message.

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